Can Europe prevent a summer of lockdowns this year?
Morgan Stanley says that they are skeptical that the EU will be able to save this year's summer given the emergence of new strains in the region, which appear to be more transmissible and dangerous - adding to the slow vaccine rollout currently.
The firm says that this puts Europe's summer reopening at risk and that could exacerbate the North-South divide in the region and could trigger further ECB policy easing.
This isn't so much so an outside call given how things are progressing in Europe lately. I shared some thoughts earlier in the week on this and how European assets have been holding up rather well in light of all the recent pessimism here.
The issue in all of this is that despite concerns, giving up a summer reopening may just be too economically painful for European countries to consider.
There's still some time to get things in order but that gap is starting narrow day-by-day. As things stand, a third virus wave beckons and that already is threatening to undermine economic output in Q2. It may only be a matter of time before it spills over to Q3.
